Followers | 43 |
Posts | 5156 |
Boards Moderated | 1 |
Alias Born | 12/19/2002 |
Tuesday, August 23, 2022 9:32:08 PM
By Anna Bahney, CNN Business
Updated 12:03 PM ET, Tue August 23, 2022
New home sales plunged in July as high prices and mortgage rates pushed buyers to think twice about closing the deal.
Sales of newly constructed homes fell by 12.6% in July from June and were down 29.6% from a year ago, according to a joint report from the US Department of Housing and Urban Development and the US Census Bureau. It was the second consecutive month of declines.
Only 511,000 new homes were sold last month, at a seasonally adjusted annualized rate, down from a revised 585,000 in June. That's the lowest sales number since January 2016. A year ago, 726,000 newly constructed homes were sold.
Meanwhile, the median price for a new construction home rose to $439,400, up from $402,400 the previous month.
A challenging road ahead
New home sales have been trending lower as prospective buyers see their budgets stretched thin by long construction times, mounting costs and rising mortgage rates. The average interest rate for a 30-year, fixed-rate mortgage was above 5% for all of July, having risen more than two percentage points since January.
"Sales of new homes continue to crumple under the weight of high prices and higher mortgage rates," said Robert Frick, corporate economist at Navy Federal Credit Union.
As inventories of new homes rise, a pullback in prices is probably coming, Frick said, although there's a limit to how low they can go given the cost of materials, land and labor that get baked into builders' costs.
"Given builders are pulling back plans to construct more homes, we won't be building our way out of the current housing crisis for years," said Frick.
The latest data continues to paint a challenging picture for the US housing market, said John Fish, CEO of Suffolk Construction and chairman of the Real Estate Roundtable.
"While the Federal Reserve attempts to reduce inflation, rising construction and land costs, supply chain disruptions and the labor shortage are contributing to the growing gap between housing demand and supply," he said.
New home construction cools as more people get priced out of the housing market
New home construction cools as more people get priced out of the housing market
In the short term, Fish said, controlling inflation will be an important step toward improving the housing market and broader economy. But there are structural issues that need to be addressed for a successful economy in the long-term, Fish said, like developing land-use policies that are aligned with federal and local governments, developing more housing, and investing in technologies that will help lower the cost of construction to make development more attractive.
"We're witnessing a housing recession in terms of declining home sales and home building," Lawrence Yun, the chief economist of the National Association of Realtors, said last week after new data showed that existing home sales had fallen for the sixth month in a row. "However, it's not a recession in home prices."
This time, the housing market's adjustment is likely to be far less severe than the correction in 2008 because there are still fewer homes for sale than households that would like to buy them, said Kelly Mangold of RCLCO Real Estate Consulting.
"Underlying demand for for-sale new homes remains," she said.
And an upshot of the downturn for buyers is that there may be less competition and more price cuts.
"For those who are still motivated to buy, the market has become a less competitive space and buyers are not facing the bidding wars that characterized much of the earlier phases of the pandemic," she said.
https://www.cnn.com/2022/08/23/homes/new-home-sales-july/index.html
Recent COOP News
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 05/30/2024 08:07:34 PM
- Form 8-K - Current report • Edgar (US Regulatory) • 05/24/2024 08:36:48 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 05/24/2024 08:33:25 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 05/24/2024 08:28:46 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 05/24/2024 08:26:19 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 05/24/2024 08:24:11 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 05/24/2024 08:22:07 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 05/24/2024 08:19:44 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 05/24/2024 08:17:44 PM
- Xome Democratizes Real Estate with Launch of DIY Sales Platform, No Agent Required • Business Wire • 05/22/2024 01:00:00 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 05/15/2024 10:47:32 PM
- Form DEFA14A - Additional definitive proxy soliciting materials and Rule 14(a)(12) material • Edgar (US Regulatory) • 05/15/2024 12:11:30 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 05/10/2024 12:12:48 AM
- Form 144 - Report of proposed sale of securities • Edgar (US Regulatory) • 05/07/2024 08:22:09 PM
- Mr. Cooper Group Reports First Quarter 2024 Results • Business Wire • 04/24/2024 11:00:00 AM
- Mr. Cooper Group Announces Two New Senior Leaders • Business Wire • 04/23/2024 01:00:00 PM
- Mr. Cooper Group Inc. to Discuss First Quarter 2024 Financial Results on April 24, 2024 • Business Wire • 04/05/2024 03:37:00 AM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 03/11/2024 09:34:36 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 03/04/2024 11:05:39 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 03/04/2024 11:04:15 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 03/04/2024 11:03:04 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 03/04/2024 11:01:41 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 03/04/2024 10:59:25 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 02/26/2024 09:28:25 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 02/14/2024 09:15:59 PM
Glidelogic Corp. Becomes TikTok Shop Partner, Opening a New Chapter in E-commerce Services • GDLG • Jul 5, 2024 7:09 AM
Freedom Holdings Corporate Update; Announces Management Has Signed Letter of Intent • FHLD • Jul 3, 2024 9:00 AM
EWRC's 21 Moves Gaming Studios Moves to SONY Pictures Studios and Green Lights Development of a Third Upcoming Game • EWRC • Jul 2, 2024 8:00 AM
BNCM and DELEX Healthcare Group Announce Strategic Merger to Drive Expansion and Growth • BNCM • Jul 2, 2024 7:19 AM
NUBURU Announces Upcoming TV Interview Featuring CEO Brian Knaley on Fox Business, Bloomberg TV, and Newsmax TV as Sponsored Programming • BURU • Jul 1, 2024 1:57 PM
Mass Megawatts Announces $220,500 Debt Cancellation Agreement to Improve Financing and Sales of a New Product to be Announced on July 11 • MMMW • Jun 28, 2024 7:30 AM